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  1. Introduction ITC's Market Analysis Tools and trade analysis

  2. The UN body for design of policy recommendations to achieve economic and social development through trade and investment. The forum to negotiate multilateral trade rules, monitor their implementation and handle trade disputes ITC works with local and regional institutions and businesspeople to promote exports and trade. What is ITC? • Mission ITC enables small business export success in developing countries by providing, with partners, trade development solutions to the private sector, trade support institutions and policy-makers

  3. ITC Development Outcomes ITC Clients Activities ITC Beneficiaries PolicyMakers Business and Trade Policy Export Impact for GoodGenerating sustainableincomes and livelihoodsespecially for poorhouseholds, by connectingenterprises to global markets Export Strategy Micro,Small andMedium-SizedExporters TradeSupportInstitutions Trade Intelligence Trade Support Institution BusinessCommunity Exporter Competitiveness One Many ITC activities One

  4. ITC organisational chart

  5. MAR activities III. Capacity Building and Training I. Market Analysis Tools II. Tailored Analysis Trade Map Introduction to Market Analysis Trade Competitiveness Assessment Market Access Map Export Potential Assessment Preparation of Market Profiles Investment Map Export Opportunity Scan Training–of–Trainers Mentoring for Tailored Analyses Sector Competitiveness Scan Trade Competitiveness Map Customised analyses Face-to-face and E-training Customised training

  6. Workshop objectives • Understand some of the main trends in the current global trade environment • Introduce ITC's Market Analysis Tools and become knowledgeable in their use • Gain an insight into how these tools can facilitate trade analysis

  7. Some trends... ...of the current trading environment

  8. Trade is enormous... Trade in goods in 2007 $13,700,000,000,000 or $420,000 per second • Globalization has accelerated over the last 20 years • The volume of trade as a percentage of global GDP has more than doubled since 1960

  9. ...and it's more dynamic than the economy... World Trade vs. GDP Growth 1960-2007 Source: WTO

  10. ... but it's not immune to the downturn... Annual Growth of Imports by Level of Development of Countries 2002-2007 Source: ITC Trade Map

  11. ...although downturn is not uniform... GDP and merchandise trade by region, 2005-07Annual % change at constant prices Source: WTO

  12. ... and 2009 will be a tough year Growth of trade volumesAnnual % change Developing country exports World trade Source: World Bank, Global Economic Prospects 2009

  13. Global trade patterns are changing... • Trade flows within regions account for a higher share of world trade than flows between regions • Asia Pacific & EU trade more within the region • However many regions trade more with other regions than internally: Africa, South and Central America, Middle East and CIS

  14. ...with developing countries gaining ground... Share of Global Trade by Level of Development% of Total Trade Source: ITC analysis based on world trade statistics

  15. ...and "south-south" trade growing fast... Top 25 markets for developing countries Source: ITC Trade Map

  16. …but mostly intra-region… Asia Pacific Intra-Trade: $ 1’121bn or 55% of S-S Trade $ 66bn $ 50bn $ 45bn $ 109bn $ 256bn Latin America $ 10bn Africa Intra-Trade: $126bnor 6% of S-S Trade Intra-Trade: $27 bnor 1% of S-S Trade $ 7bn $ 8bn $ 16bn $ 109bn Middle Eastand Arab $ 6bn $ 12bn Intra-Trade: $62bnor 3% of S-S Trade Total 2007 S-S Trade: $2’157 billion Source: ITC

  17. The mix of products traded is changing... Global trade by type of commodity% of total trade Source: ITC Trade Map

  18. ... but not all sectors are equally successful The best performing exports from developing country exporters tend to be manufactured products, as opposed to commodities

  19. Trade in services grows quickly... Trade in Services as % of GDP1975 – 2007 Source: World Development Indicators, World Bank

  20. ...significantly due to FDI... • In spite of quick growth in traded value, over the past 30 years the share of services, excluding Mode 3 (commercial presence), in global trade has been quite stable around 20% • BUT, Mode 3 is not captured in current trade in services statistics • FDI data shows that more than half of FDI flows are in the services sector • FDI keeps on growing globally...

  21. …which is ever more important FDI as % of World GDP1985 – 2007 Source: World Development Indicators, World Bank

  22. Number of Existing Trade Agreements 1960 – 2007All countries, all types of agreements Market access issues are changing: • Trade agreements proliferate... Source: WTO

  23. … reducing tariffs… Applied MFN Tariffs, All Products, By Level of Income Source: World Trade Indicators, World Bank

  24. … and making NTMs more important NTM FrequencyBy Level of Income, 2001 Source: World Trade Indicators, World Bank

  25. Business environment matters… Source: World Bank Doing Business Report 2009

  26. ...because it affects trade, inter alia Source: World Trade Indicators 2008, World Bank

  27. Register to access ITC’s Market Analysis Tools

  28. Free to users from developing countries Thanks to financial contributions from ITC's Global Trust Fund and the World Bank, as of the 1st January 2008, all users from developing countries and territories may access ITC's market analysis tools free of charge. http://www.intracen.org/mat

  29. Free to users from developing countries

  30. Trade Map A web-based trade flow analysis tool

  31. Introduction • An exporter of pineapples is looking to diversify its client base…Which country should be targeted? • A shoe exporter needs an overview of trade barriers he/she would face for exports to Malaysia… • A trade mission needs to know our top export products to Germany… • Where could you import automotive components from?Who are the largest suppliers in your region? • What is the current trade between your country and the United States? Initial answers to these questions and many more are easily found in Trade Map

  32. Trade Map • Online application to produce reports on international trade flows • Every product (HS-6) to and from (almost) every country • Based on probably the largest trade flow database in the world • User-friendly interface, report-ready outputs • Flexibility for customising reports, analysis • Graphic presentation of outputs to facilitate analysis

  33. Key characteristics • Where does the data come from? • National Authorities • COMTRADE, produced by the United Nations Statistics Division database • What is Trade Map’s geographical coverage? • Information for over 220 countries and territories using data reported by 160 countries and territories • Data for non-reporting countries is spawned from mirror statistics • What is Trade Map’s product coverage? • For the Harmonized System • over 5,300 products at the 6 digit level • For the National Tariff Line • up to 30,000 products for 90 countries (~84% of world trade) • What is Trade Map’s time horizon? • Yearly, quarterly and monthly data

  34. Data classification • The Harmonized System (HS) • Is used as a basis for the collection of Custom duties and international trade statistics by almost all countries, representing about 98% of world trade • Developed by the World Customs Organisation – WCO (www.wcoomd.org) • Implemented late 1980s. • Harmonised different existing nomenclatures • Adopted by almost all countries in the world • Basis for all trade conversations internationally • Main revisions in 1996 and 2007

  35. More and more specific HS-2 HS-4 HS-6 Data classification • The Harmonized System (HS) • Is a numerical classification system of products used as a basis for international trade statistics by almost all countries. • is harmonized up to six digits (HS-6) - You can compare HS data between countries. • Is broken down into 3 clusters: • HS-2: the chapter of the good (sector) • E.g. 09 = Coffee, Tea, Mate and Spices • HS-4: groupings within the chapter (sub-sector) • E.g. 0902 = Tea, whether or not flavoured • HS-6: product(s) within the grouping (product level) • E.g. 090210 = Green tea (not fermented)

  36. HS-2 HS-4 HS-6 NTL Data classification • National Tariff Lines (NTL) codes • Classification of goods after the 6 digit level of the Harmonized System classification. • National Tariff Lines go from 8 digits to 12 digits. • Why use the HS and NTL classification? • The HS classification is standardised internationally • The NTL classification is not standardised internationally. Each country decides its own further classification after the Harmonized System. Hence, National Tariff Line codes can be different from a country to another. More and more specific

  37. Data classification HS(International standard) 08 Edible fruit and nuts; peel of citrus fruit or melons. 08.04 Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh or dried. 08.04.50 Guavas, mangoes and mangosteens. Australia 08.04.50.00 Fresh or dried guavas, mangoes and mangosteens Japan 08.04.50.01.1Mangoes, fresh 08.04.50.01.9 Guavas and mangosteens, fresh United States: 08.04.50.40.40Mangoes, fresh, if entered during the period from September 1, in any year, to the following May 31, inclusive 08.04.50.60.80 Guavas and mangosteens, fresh, if entered during the period from June 1 to August 31, of the following year, inclusive 08.04.50.80.00 Guavas, mangoes and mangosteens, dried NTL(NONstandard)

  38. Market Access Map Information on tariffs and other market access conditions

  39. Market Access • Information on market access conditions allows exporters to: • Evaluate the competitiveness of the product relative to suppliers from other countries under different tariff schemes • Select markets/market segments in which the product has the best prospects • Adapt, where necessary, the product to conform to the target market’s import regulations

  40. Types of tariffs • Ad valorem tariffs: • Levied on the basis of the value • Used by most countries; more than 87% of tariffs worldwide are ad valorem

  41. French wine: • AUD 8 / litre • New Zealand wine: • AUD 6 / litre Tariff paid:AUD 0.40 /litre Tariff paid:AUD 0.30 /litre Ad valorem tariffs E.g. Australian tariff of 5% on imported wine (22.04.21.20.70) Tariff per unit = Price * Rate

  42. Types of tariffs • Ad valorem tariffs: • Levied on the basis of the value • Used by most countries: more than 87% of tariffs worldwide are ad valorem • Specific tariffs: • Levied on the basis of volume or weight • Users of specific tariffs include (% of MFN tariff lines): Switzerland (79.8%), Thailand (21.9%), Russia (12.2%), Argentina (12.1%), Belarus (11.9%), USA (8.2%), EU (4.6%)

  43. Before border After the border The prime beef is now only 1.4 times the price of the low quality beef, but still 4 times the quality The prime beef is 4 times the price of the low quality beef, but also 4 times the quality At border =150% ad valorem equivalent CHF18 specific tariff per kilo = 600% ad valorem equivalent CHF30 / kg Argentine prime quality beef CHF21 / kgregularbeef CHF12 / kg Argentine prime quality beef CHF3 / kg beef Specific tariffs change relative prices E.g. Switzerland's tariff on beef of CHF18 / kilo (02.01.30)

  44. Types of tariffs • Ad valorem tariffs: • Levied on the basis of the value • Used by most countries: more than 87% of tariffs worldwide are ad valorem • Specific tariffs: • Levied on the basis of volume or weight • Users of specific tariffs include (% of MFN tariff lines): Switzerland (79.8%), Thailand (21.9%), Russia (12.2%), Argentina (12.1%), Belarus (11.9%), USA (8.2%), EU (4.6%) • Combined tariffs: • Contain both ad valorem and specific rates • Eg: 10% of the value + $2 per kilogram (Japan, EU, Canada)

  45. Tariff = USD801 AVE = 13% Tariff = USD665 AVE = 21% Compound tariffs • Chocolate from Switzerland: USD 6,356 / ton • Chocolate from Brazil: USD 3,181 / ton E.g. USA tariff on chocolate of 4.3% and USD528 / ton (18.06.32.08) Tariff: 4.3% Ad Valorem USD273 Tariff + USD528/ton Specific USD528 Tariff Tariff: 4.3% Ad Valorem USD137 Tariff + USD528/ton Specific USD528 Tariff

  46. Types of tariffs • Mixed tariffs: • Minimum or maximum of two kinds of tariffs • Eg: Min or Max (10%, $2/kg) (Canada, EU, Japan)

  47. Tariff = USD300 AVE= 30% Tariff = USD36 AVE= 120% Mixed tariffs • Manolo Blahnik shoes: USD1,000 /pair • Clark's shoes: USD30 /pair e.g. Japanese tariff on shoes: Max. of 30% or JPY4,300 Yen / pair Tariff: the maximum of 30% Ad Valorem USD300 Tariff Or JPY4,300/pair (USD36) Specific USD36 Tariff Tariff: the maximum of 30% Ad Valorem USD9 Tariff Or JPY4,300/pair (USD36) Specific USD36 Tariff

  48. Types of tariffs • Mixed tariffs: • Minimum or maximum of two kinds of tariffs • Eg: Min or Max (10%, $2/kg) (Canada, EU, Japan) • Variable tariffs: • Levied on the basis of the composition of the products • Eg: USD5/unit if lead content of paint > 2% on toys • USD200/unit on fridges if cooling system is not CFC-free